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Best Long-Term Crypto Investments – Forbes Advisor

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Editor’s note: I earn commissions from partner links on Forbes Advisor. Commissions do not affect editors’ opinions or ratings.

So far, nearly all asset classes have been crushed in 2022. Stocks and bonds fell sharply, with gold down about 10%. Only cash equivalents maintain positive returns.

None of these have been as painful as cryptocurrencies. November 2021, Bitcoin (BTC) was near $69,000 and is now around $20,700, down nearly 70%. ethereum (ETH) is down 58%.

Altcoins are not better. Cardano (ADA) and Solana (SOL) are down more than 70% and 55% respectively from their year-to-date values.

So where are the cryptocurrencies you can invest in right now?

Beware of the Cryptobear Market

This year’s drawdown is just the latest in a series of bearish cycles in this highly cyclical industry.So why do you feel so strict this time Cryptocurrency?

It’s worth remembering that during the Great Recession and Financial Crisis of 2008, cryptocurrencies did not exist. Satoshi Nakomoto It first launched Bitcoin in 2009.

Between then and the end of 2021, the US stock market enjoyed one of the longest bull markets in history.

Cryptocurrencies have grown tremendously since their early days, so extrapolating historical price data to the present is a difficult business.

what we already know crypto winters Some cryptocurrencies will no longer exist, and it is unlikely that cryptocurrencies will rise significantly until the stock market recovers.

So the coins you invest in are the ones with the strongest fundamentals, mostly real-world use cases. These cryptocurrencies are most likely to withstand long-term restrained purchases.

A cryptocurrency that relies on marketing and community. meme coinonly stand to benefit bull market Hysteria, limited survival during depression.

The past crypto winter wasn’t too difficult, but many coins failed to recover from all-time highs. Of course, others are gone forever, and this time is no exception.

Large ciphers are the most secure

As with blue chip stocks, the biggest cryptocurrencies are likely to weather the storm the best.

  • Bitcoin. It should come as no surprise that Bitcoin, the world’s largest cryptocurrency, is currently the safest bet. bear marketThe market capitalization is still $396 billion and is embedded in the balance sheets of publicly traded companies. Institutional adoption is growing and carving out a role in mainstream financial markets.
  • Ethereum. ETH has established itself as the leading smart contract blockchain, the base layer of the decentralized economy. Ethereum and Bitcoin account for nearly 60% of his market.
  • US dollar coin (USDC). With markets everywhere plummeting, this stablecoin It was one of the leading crypto refugees of the year as it is based on the ultimate safe-haven US dollar. Matt Forrester, chief investment officer at BNY Mellon Pershing’s Rockwood Advisors, told Forbes Advisors: “It’s a juggernaut in the middle of every stock transaction and payment in the world.”

Note that owning a fiat-based stablecoin is a way for crypto investors to secure their wealth in dollars without leaving the cryptocurrency market.

It can also make yields available to investors within decentralized financial protocols (DeFi). These DeFi protocols support financial products and services built on top of blockchain technology.

How to invest in crypto long term

Crypto investing should be viewed through a long-term lens. In the short term, cryptocurrencies tend to fluctuate greatly in value.

Speculators without a long-term time horizon take greater risks from the increased volatility of the cryptocurrency market. If investors can hold onto cryptocurrencies for the long term, they can weather short-term price storms as long as the underlying assets have value and can survive bear markets.

Short-term trading has a much greater range of profits (and losses). For some observers, the difference comes down to gambling and investing. The former are more likely to be profitable in the short term, but lie far outside the risk spectrum. Of course, the greatest upside comes with the greatest risk.

It is important to remember that the majority of crypto investors are currently in the red this year.

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